Is there a private sector route to abolishing global poverty?

I’m in Spain for 48 hours to discuss with union colleagues around the world the issue of private sector development (you can follow my live tweets at #ptesecdev). Private sector development is a big thing in the international development world at the moment, so it’s important that unions from the global north and south work out a response and decide how to engage.

The reason private sector development is such a big issue is partly ideology: many northern governments involved in international development (such as the UK, but also Sweden, Canada and Australia) are under right-wing control. DFID’s Justine Greening has put the private sector at the heart of her rather dry, accountancy-inspired ‘vision’ of development.

But it’s also about money. As those and other Governments plunge deeper and deeper into austerity, there is less and less money available for overseas development aid (even the UK is actually spending less partly because of budget underspends), and governments are turning to the private sector for help.

So what should the trade union response be? So far, our discussions have uncovered surprising lack of clarity about what the private sector development agenda actually is.

World Bank president Jim Kim wrote a blog for Oxfam yesterday which praised two private sector initiatives for helping poor people get less poor. Even in the trade union movement no one claims that everything the private sector does is bad, and Swedish unions even run some of their development programmes in partnership with the employers. But if some employers do good in developing countries (there’s an old trade union joke that the only thing worse than being exploited by a multinational company is not being exploited by a multinational company at all), there are an awful lot who do bad things, and any private sector development strategy has to start from a balanced view of the experience of the private sector in the global south.

President Jim Kim also said in his article that the World Bank wouldn’t compromise on its principles in developing its private sector strategy, but today he publishes the Doing Business 2014 report, and the signs are not good that those principles are worth sticking to!

Unions here in Barcelona are arguing that, whether a private sector strategy involves channeling aid through private hands (probably the least popular way to involve the private sector from a trade union perspective), guaranteeing private sector investment in infrastructural or job creating projects in the south, or procurement from the private sector (eg the anti-malarial bed nets DFID pays for), certain conditions need to apply. Private sector development must be judged not just on whether it delivers economically, but also socially and environmentally, including providing decent work.

Today we’ll be turning to what the tests for private sector development actually are, and more importantly, how we secure support for their implementation.

Written by Owen Tudor

I’ve been the Head of the TUC’s European Union and International Relations Department since 2003 and have worked at the TUC since 1984. I’ve been a member of the Health and Safety Commission, the Civil Justice Council, the Social Security Advis…